Amigo Holdings (LSE: AMGO) unveiled its first quarter results for the three month period ending 30 June 2021 and showed a sign of promise despite the uncertainty that remains over its future.
Fort the respective quarter, AMGO unveiled a reported statutory profit after tax of £16m, a distinct improvement compared to the comparable quarter of last year with a figure of £3m.
This comes against a backdrop of a pause in lending which saw revenue reduce to £32.5m, showing a 33.4% decline.
Commenting on the performance was Mike Corocan, the CFO of Amigo Holdings who explained that the fact there were no additional complaints provision made in the quarter (currently at £338m) helped to boost profits:
“The extremely challenging situation facing Amigo, resulting from the significant liability for compensation payments for historical lending, provides the context for our first quarter results. Within this context, the performance of the business in the first quarter has been better than anticipated. As Amigo is not currently lending, the business is cash generative and our cost reduction programme has been effective. The level of collections remains robust with the impact of Covid-19 less than originally projected. Our current estimate of the potential liability for claims redress was reflected in the recently issued full year results. With no additional complaints provision recognised in the quarter, Amigo generated profits before tax of £15.0 million in the period. The overall net liability position reflects the remaining complaints provision on the balance sheet. A material uncertainty over the Group’s ability to continue as a going concern remains.”
Amigo is currently in process of create a new proposal to deal with the proposed compensation for mis-selling claims to satisfy the FCA and High Court.
The AMGO share price was given an early boost in early trading, gaining 3 percent at 8.13p.